Chattem will go head-to-head against some of the biggest health and beauty industry giants in America when it launches allergy drug Allegra, its chief executive said Thursday.
"This is going to be smash-mouth football. We're going right at the Claritin, right at the Zyrtec," said CEO Zan Guerry about Allegra competitors. "No end runs. We're going after them."
Mr. Guerry said that bringing Allegra to market as a nonprescription drug probably will be "one of the top five launches in the history of health and beauty aid industry in America."
"We'll spend more on advertising on Allegra ... than the entire advertising budget on all 26 Chattem brands," he told Chattanooga Rotarians. "That tells you it's exciting."
Chattem was purchased late last year for $1.9 billion in cash by French pharmaceutical company Sanofi-Aventis, the maker of drugs such as Allegra and heart medicine Plavix.
Chattem has become the U.S. headquarters for Sanofi-Aventis' over-the-counter operations, which it hopes to grow sharply with the blockbuster purchase of the 130-year-old Chattanooga business.
Mr. Guerry said Chattem has rarely gone up against industry titans such as Procter & Gamble and Johnson & Johnson.
"I plan to be very difficult for Zyrtec and Claritin," he said. "Most of the big companies are saying we can't do it, that we can't compete. Maybe in 18 months we'll find out. It's not going to be for lack of intensity."
Richard Casavant, dean of the University of Tennessee at Chattanooga's business school, said going up against the likes of Procter & Gamble will be a challenge.
Dr. Casavant said Chattem is making the move from an industry niche player.
COMPANY REVENUES 2009
Procter & Gamble -- $76.6 billion
Johnson & Johnson -- $61.9 billion
Unilever -- $57.1 billion
Sanofi-Aventis -- $40 billion
Kimberly-Clark -- $19.1 billion
Source: The companies
"That's a different ball game," he said. "It's a great opportunity for the city."
The Chattem chief said Allegra probably will be a $250 million to $350 million brand.
"That adds 50 to 60 percent to our business right now," he said. "I think we've got a good growth vehicle."
Mr. Guerry said the $35.5 million expansion under way at its Board Street plant, the largest in company history, holds potential for making products other than the planned manufacture of Act mouthwash.
The company also plans to add up to 70 jobs, which would bring its employee headcount to about 500 in the city.
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